The Securities and Exchange Commission has approved amendments to Forms U4 and U5, which, respectively, are forms used to apply for or to terminate securities industry registration. The amendments, among other things, add new regulatory action disclosure questions intended to enable the Financial Industry Regulatory Authority and other regulators to identify individuals and firms subject to disqualification as a result of a finding of a willful violation, require firms to report allegations of sales practice violations made against a registered person in an arbitration or litigation in which that person is not a named party, increase the monetary threshold for reporting settlements of customer complaints, arbitrations or civil litigation from $10,000 to $15,000 and, as to Form U5, revise the “Date of Termination” definition and enable firms to amend the “Date of Termination” and “Reason for Termination” sections, subject to certain conditions and notifications. The amendments regarding sales practice violations, the monetary threshold and the date of and reason for termination became effective on May 18 (along with other clarifying and technical amendments, as further discussed in FINRA Regulatory Notice 09-23). The amendments adding new regulatory action disclosure questions with respect to willful violations will become effective on November 14.
Click here to read FINRA Regulatory Notice 09-23.